Head of China Research - Forsyth Barr Asia, Forsyth Barr Asia

David Millhouse

Head of China Research - Forsyth Barr Asia

Forsyth Barr Asia

Thematic (Sector/Industry)

There is a growing expectation that mergers involving huge state-owned conglomerates could be part of China's soon-to-be-announced reforms of state-owned enterprises, according to a report in today's Securities Daily. Li Jin, deputy head of the China Enterprise Reform and Development Society, said that state-dominated industries with problems of overcapacity, namely construction, electricity and rail would "face large scale mergers and restructuring". The article also notes that rumours of mergers in the construction, energy and telecommunications industry have been circling for a while now. The mergers could help reduce excessive competition between large SOEs, cut waste, encourage the formation of huge conglomerates that could better compete against large foreign firms and also assist in the internationalisation of the Chinese yuan. &nbsp;Below we look at what sectors and stocks could be effected.

There is a growing expectation that mergers involving huge state-owned conglomerates could be part of China's soon-to-be-announced reforms of state-owned enterprises, according to a report in today's Securities Daily. Li Jin, deputy head of the China Enterprise Reform and Development Society, said that state-dominated industries with problems of overcapacity, namely construction, electricity and rail would "face large scale mergers and restructuring". The article also notes that rumours of mergers in the construction, energy and telecommunications industry have been circling for a while now. The mergers could help reduce excessive competition between large SOEs, cut waste, encourage the formation of huge conglomerates that could better compete against large foreign firms and also assist in the internationalisation of the Chinese yuan. &nbsp;Below we look at what sectors and stocks could be effected.

CHINA SOE REFORM: Detailed plan due in the next 3 weeks. Potential implications  

China is proposing an overhaul of its foreign-investment rules, which some news sources are saying is "the biggest revamp of China’s rules governing foreign investment since Deng Xiaoping introduced elements of capitalism into the economy in the late 1970s." The draft looks to unify regulations overseeing foreign investment in China, scale back restrictions and begin regulating the variable interest entities (VIE) that are commonly used to circumvent foreign-ownership limits. The ministry said the rules should “promote foreign investment and normalize foreign investment management.” This represents a major step toward the formal regulation of the use of VIE structures in foreign investments in China, as well as simplifying rules for foreign companies looking to invest in China. Thoughts and implications of the changes below

 China is proposing an overhaul of its foreign-investment rules, which some news sources are saying is "the biggest revamp of China’s rules governing foreign investment since Deng Xiaoping introduced elements of capitalism into the economy in the late 1970s." The draft looks to unify regulations overseeing foreign investment in China, scale back restrictions and begin regulating the variable interest entities (VIE) that are commonly used to circumvent foreign-ownership limits. The ministry said the rules should “promote foreign investment and normalize foreign investment management.” This represents a major step toward the formal regulation of the use of VIE structures in foreign investments in China, as well as simplifying rules for foreign companies looking to invest in China. Thoughts and implications of the changes below

CHINA REFORM & ADRs:  Big overhaul of foreign investment rules in China. Thoughts and implications

China

Hangzhou Hikvision Digital Technology Co., Ltd develops, manufactures and sells video surveillance products.  The Company manufactures video and audio compression card, network hard disk video recorders, video servers, cameras, network storage, and other digital products.

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Hangzhou Hikvision (002415 CH)

CHINA SOE REFORM: Detailed plan due in the next 3 weeks. Potential implications

There is a growing expectation that mergers involving huge state-owned conglomerates could be part of China's soon-to-be-announced reforms of...

David Millhouse

CHINA REFORM & ADRs: Big overhaul of foreign investment rules in China. Thoughts and implications

China is proposing an overhaul of its foreign-investment rules, which some news sources are saying is "the biggest revamp of China’s rules...

David Millhouse

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)